Session 06-12 a Regular Meeting of the Homer City Council was called to order at 7:00 p.m. by Mayor James C. Hornaday at the Homer City Hall Cowles Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska, and opened with the Pledge of Allegiance.

PRESENT: COUNCILMEMBERS: HEIMBUCH, McLAY, NOVAK, SHADLE, STARK, WYTHE.

STAFF: CITY CLERK CALHOUN

CITY MANAGER WREDE

Department Heads may be called upon from time to time to participate telephonically.

Council met as a Committee of the Whole from 4:00 to 5:06 p.m. in the Homer City Hall Cowles Council Chambers - Agenda items: Fish and Fish Processor Incentives, PERS Fiscal Impacts and the Regular Agenda Items.

AGENDA APPROVAL

(Addition of items to or removing items from the agenda will be by unanimous consent of the Council. HCC 1.24.040.)

The agenda was approved by consensus of the City Council with the following changes: Ordinance 06-12(S) to accompany Memorandum 06-70 and Public Comment on Ordinance 06-30. Revised Mayor's Welcome to National Park Service and Councilmember Shadle's Juneau Lobbying Trip Report and Mayor's Proclamation Public Safety Officer's Recognition Day, July 16, 2006, Peace Officers Memorial Day May 15, 2006 and National Police Week May 14-20, 2006.

Scheduled visitor Lindsay Henkelman was unable to make this meeting and the Mayor placed her presentation on the agenda for the May 22, 2006 Regular Meeting.

Mayor Hornaday had submitted Resolution 06-53 in the supplemental packet for addition to this meeting's agenda under Consent Agenda and after further review pulled this addition of Resolution 06-53.

PUBLIC COMMENTS UPON MATTERS ALREADY ON THE AGENDA

Public Comments on any matter already on the agenda except Visitor Lindsay Henkelman, and public hearing items Ordinance 06-20(A), Amending Zoning Map for Gateway a Business District, Ordinance 06-24, Amending HCC 1.72 Port and Harbor Advisory Commission,Ordinance 06-25, Amending HCC 1.78 replace OEDP with CEDS, Ordinance 06-26(A) and 26(S) appropriating the Dock settlement funds, and Ordinance 06-30, Seasonal Sales Tax .

There were no public comments.

RECONSIDERATION



A. Memorandum 06-68, from City Clerk, Re: Reconsideration of Ordinance 06-21, Notice by Mayor Pro Tempore McLay.

Recommendation: Approve reconsideration.

McLAY/STARK - SO MOVED FOR THE APPROVAL OF THE RECOMMENDATION OF MEMORANDUM 06-68 TO RECONSIDER ORDINANCE 06-21.

Mayor Pro Tempore McLay noted that the reason for reconsideration was to make two technical amendments.

VOTE: YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

Reconsideration of the Ordinance is under Ordinances.

CONSENT AGENDA

(Items listed below will be enacted by one motion. If separate discussion is desired on an item, that item may be removed from the Consent Agenda and placed on the Regular Meeting Agenda at the request of a Councilmember.)

Councilmember Novak requested that Items E. and G. be placed under New Business as Items A. and B.

A. Homer City Council unapproved meeting minutes of April 24, 2006 Special and Regular Meetings. City Clerk. Recommend approval.

B. Ordinance 06-28, Of the City Council of Homer, Alaska, Amending Chapter 1.60 by Adding a new Section Entitled National Incident Management System (NIMS). City Manager. Recommend Introduction and Conduct Public Hearing and Second Reading on May 22, 2006.

C. Resolution 06-37, Of the City Council of Homer, Alaska Awarding the Contract for Professional Engineering Services for Planning and Design of Improvements to the Deep Water Dock to PND Engineers, Inc. of Anchorage, Alaska and Authorizing the City Manager to Negotiate Compensation and to Execute the Appropriate Documents. City Clerk. Fiscal Note: Revenue and Expenditure Account 415-921, dollars pending receipt, acceptance and appropriation of grant.Recommend adoption.

Memorandum 06-69, through the City Manager as backup.

D. Resolution 06-52, Of the City Council Amending the City Fee Schedule Under Port and Harbor, to Add the Parking Fees for Ramp 1, 2, 3 and 4 for Memorial Day through Labor Day. City Clerk. Recommend adoption.



E. Memorandum 06-70, from Mayor Pro Tempore McLay, Re: Scheduling Public Hearing for Ordinance 06-12(S) for May 22, 2006. Recommend adoption.

Placed under New Business as Item A.

F. Memorandum 06-71, from City Clerk, Re: Authorization to Pursue Either Expansion of Hickerson Memorial or Search and Plan for a New Cemetery Location. Recommend approval.

G. Memorandum 06-76, from City Manager, Re: Dedication of Land for Right of Way Purposes in the Town Center. Recommend approval.

Placed under New Business as Item B.

H. If added under Agenda Approval: Resolution 06-53, Of the Homer City Council Expressing Support of the Homer Hippie Chicks in their Participation in the "Relay for Life" Donation to the American Cancer Society for "Hope for a Cure". Mayor. Fiscal Note: $100.00 from Account. 100.100.5206. Recommend adoption.

Not added at the Mayor's request.

HEIMBUCH/SHADLE - SO MOVED FOR THE ADOPTION AND/OR APPROVAL OF THE RECOMMENDATIONS OF THE CONSENT AGENDA AS READ AND AMENDED.

There was no discussion.

VOTE: YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried. Items E. and G. were placed under New Business.

VISITORS

Pulled A. Lindsay Henkelman, Homer's Representative for the International Student Exchange with Homer's Sister City Yelisovo, Russia.

Plans to make her presentation at the May 22, 2006 meeting with the approval of Mayor Hornaday.

ANNOUNCEMENTS/PRESENTATIONS/BOROUGH REPORT/COMMISSION REPORTS

A. Mayoral Recognitions.

1. Welcoming National Park Service, Alaska Leadership Council to Homer May 9, 2006 as revised.

Presentation tomorrow night at the National Park Service Leadership Council meeting.

2. Appreciation to the National Park Service for Lake Clark National Park

Presentation of plaque to Joel Hard and Mary McBurney.

Mayor Hornaday read the Plaque into the record: Mayor's Appreciation expressed to the National Park Service for Lake Clark National Park: WHEREAS, Lake Clark National Park and Preserve has recently established an office in Homer, and WHEREAS, The Superintendent of Lake Clark National Park has determined that there are many compelling reasons to have a National Park Service Presence in Homer, and WHEREAS, A presence in Homer provides opportunities for the Park to improve public education, interpretation, and concessionaire services, and WHEREAS, Homer is surrounded by public lands and serves as a gateway community for Lake Clark, Katmai, and Kenai Fiords National Parks, the Kenai and Alaska Maritime National Wildlife Refuges, Kachemak Bay State Park, and McNeil River Wildlife Sanctuary, and WHEREAS, Locating in Homer provides Lake Clark National Park staff the opportunity to collaborate and share resources with other state and federal agencies and nonprofits that are already here including the U.S. Fish and Wildlife Service, the Soil and Water Conservation Service, the Alaska Department of Fish and Game, Alaska State Parks, the Kachemak Bay Research Reserve, the University of Alaska, the Pratt Museum, and the Center for Alaska Coastal Studies, and WHEREAS, Establishing a National Park Service Presence in Homer promotes the community's economic development goals including an emphasis on sustainable development that protects the natural environment, enhances and complements the existing economy, and is consistent with community values. NOW THEREFORE, I, James C. Hornaday, Mayor of the City of Homer, do hereby welcome Lake Clark National Park to the community. The City Council and the citizens of Homer look forward to a long and mutually beneficial partnership between the City of Homer and the National Park Service.

B. Memorandum 06-72, Councilmember Shadle Travel and Lobbying Report as revised.

C. Memoranda 06-74 and 06-75, Port and Harbor Commission Reports, Re: Parking and Pedestrian Crossing at the Base of the Spit and Resolution 06-47(A), Overslope Development Task Force.

D. Memorandum 06-77, from Library Advisory Board, Re: Request for Resolution Naming the Children's Room and the "Joy Griffin Children's Library".

E. Added under Agenda Approval: Mayor's Proclamation Public Safety Officer's Recognition Day, July 16, 2006, Peace Officers Memorial Day May 15, 2006 and National Police Week May 14-20, 2006.

Mayor Hornaday recognized Councilmember Stark for his work on the AML Board of Directors and his efforts in bringing the AML Summer Conference to Homer, in August, adding that he has heard there may be anywhere from 100 to 300 coming to Homer for that Conference. He noted that the City Clerk is assisting the AML Staff to make that a successful event. He advised the Council that he has suggested that there be a panel discussion by the Governor candidates during the AML session. He encouraged the Council to contact Councilmember Stark or the City Clerk regarding the AML Summer Conference. He reported on the South Peninsula Hospital 50th Anniversary Celebration, that it was a very good feeling and that it was a very happy event. He commented on the old pictures of the hospital with Anna Gannaway, Helen Alm, Dr. Eneboe and all of the other wonderful people of the hospital over the 50 years. He noted that it was a very good visit at the Library with Bill Allen, Mr. Davis with Rural Development from D.C., Michele from the Kenai Office and Kurt Marquardt and others who gave a very good tour of the new library. He relayed the excitement and positive feeling and that there are a lot of locals working on that project. He reported that Homer is the poster child and will be on the front page of their magazine. He recognized other participants in the Library tour such as the City Manager, Anne Marie Holen, Helen Hill, Carey Meyer, Ben Gibson, etcetera. He advised that his understanding is that the project is on time and on budget. He shared the depressing news regarding the vandalism at the Karen Hornaday Hillside Park Little League Ball Field, which is very discouraging. He expressed his personal hurt due to all the time, effort and work done on the fields. He noted that he grew up in the mid west where everybody played ball. He emphasized that he just does not understand why young people do these things.

PUBLIC HEARING(S)

A. Ordinance 06-20(A), Of the City Council of the City of Homer, Alaska Amending Homer City Zoning Map to Rezone to Gateway a Business District (a Sub District of the Central Business District), Portions of Rural Residential (RR) and Portions of Urban Residential (UR) Zoning Districts fronting on the Sterling Highway West Hill Area to the South West Boundary of the Central Business District (CBD). Heimbuch. (First Reading March 13, 2006, and forwarded to the Planning Commission to Conduct two public hearings no later than April 19, 2006 and for review and comment and to respond back to Council no later than April 30, 2006, Council's Public Hearing: May 8, 2006 and Second Reading: May 22, 2006. )

Memorandum 06-73, from Planning Commission.

Mayor Hornaday reiterated his conflict of interest, handed the gavel to Mayor Pro Tempore McLay and excused himself from the table at 7:18 p.m.

Gary Hinkle distributed some information and thanked the Council, very sincerely, for making the recommendation for this zone change. He noted that he requested this zone change 27 years ago and that he has land that has been held in a condition of not being compatible with use and therefore has had a moratorium of construction for 27 years. He then introduced himself as he signed in and reiterated his thanks to the Council. He advised that he became aware of "this" shortly after he bought his property that he could not build residential on it, that he was visiting Mari Walli in the old Walli homestead cabin adjacent to his lot and that the noise was so bad with the trucks coming into town, slowing to make the corner onto Pioneer, there being no Bypass at that time, that they would have to stop conversing until the truck was by and they could proceed. He reported that he requested a zone change, which was declined, and that when he started hearing about the proposed zone change a couple of years ago he participated, signed into it and worked toward it. Now that it has come up again from the Council, he advised that he attended the Planning and Zoning meetings and supported it, noting that during at least one meeting everyone testified in support of the change. He advised the Council that he became concerned about the status of this and so put a considerable amount of work into it, researched all of the objections and found that the objections fit into three categories: 1) Fear that the Gateway Commercial purposes would have a negative impact and falls into an aesthetic question. He noted that he has paid taxes all of these years and has supported strongly the water and sewer paying the assessments, logged the beatle kill, cleared the stumps for fire protection and that in every way that he can see he has been a very positive land owner here. He stated that he is rather appalled at the idea that someone would assume that he would do an unaesthetic, unattractive development. He emphasized that he has made his entire living, for more than thirty years, in real-estate. He noted that it would be very much to his disadvantage and that he does not understand that worst case scenario concept. He pointed out that the best way to have the kind of development that he thinks people of Homer want, as he is hearing it, is to work with the developers to create the kinds of properties that all want. 2) The issue of not fitting the Comprehensive Plan, more specifically, spot zoning. The land is not located in a spot zoning isolated condition. It is contiguous to the Bidarka Inn and its contiguous on through the area. He cited Griswold vs. City of Homer, that it is very clear that the issue is negatives versus positives and, obviously, the positives far outweigh the negatives. 3) The fear of business competition. Candidly that has no standing in court. That is not a legitimate zoning issue. He concluded by saying that he would like to have opportunity to discuss this in a positive way with more time. He offered to answer any questions of the Council and there were none.

Emmitt Trimble advised that he came to speak in support of the passage of this zoning change. He noted that there has been considerable testimony at the public hearings in front of the Planning Commission from residents of the area, there has been a petition that has a vast majority of the property owners in support of this and that he has not heard any testimony regarding the down side expanding the Central Business District or what it is about the Central Business District classification as it exists now that is onerous, that would be problematic in this area. He voiced his thought that the market has spoken to this land use pattern, in that nothing has been constructed of a residential nature in 30 years in that area and the uses of that property are currently restricted by its current zoning classification. He encouraged the Council to pass this Ordinance and to change this zoning classification and allow that growth in that area up to the West Hill. He asked if there were any questions, there were not.

Kurt Marquardt, resident of City of Homer, stated that he is going to take the opposite approach. He and pointed out that it does say on the notice on the seats that the public has five minutes for comment and that given the lack of audience here tonight, it also says that the Mayor or Mayor Pro Tempore can determine the amount of time that is authorized and that he thinks the three minute thing or five minute thing is nice to speed along the meetings but also if it's not a big evening it would be nice to see people given an opportunity to say what's on their mind. He stated that he is not necessarily in favor of this Ordinance the main reason is that he is not in favor of seeing the Central Business District expanded beyond the present boundaries. Homer is already spread out enough. Homer is one of the few coastal communities in the state that actually has the harbor five miles from town instead of right in town, that right off the bat starts to create a dynamic that makes people drive more and walk less. There is plenty of opportunities for infill in the existing boundaries of the Central Business District for commercial opportunities that are proposed to be allowed within the Gateway District. A big thing is that by expanding the business district it just does harm to the sense of the small town character that Homer has with visitors and residents alike. Homer is a unique community. This Ordinance is detrimental to that unique aspect of Homer. He stated that he guessed that he would say that if this Ordinance is in favor with the Council that the allowed uses such as the personal establishments, kind of the smaller home based or office based establishments versus, say, a car lot or another grocery store, larger commercial enterprises, another lumber yard, which are not allowed in the Ordinance as it is written, are steps in the right direction, any way. He stated that he guessed that this was about all he had to say, mainly speaking to the small town character of Homer and trying to do what he can to maintain that. He commented on one other thing, the Town Center that there is going to be opportunity in the Town Center for further commercial development, that this is a rather large tract of land that, according to the owners, will be make available to private individuals for these types of development. He thanked the Council very much and expressed his appreciation for their service.

Mayor Pro Tempore McLay called for a recess at 7:30 p.m. reconvening the meeting at 7:36 p.m.

B. Ordinance 06-24, Of the City Council Amending Homer City Code Chapter 1.72 Title to Read Port and Harbor Advisory Commission. City Clerk. Housekeeping type Ordinance. (First Reading April 24, 2006, Public Hearing and Second Reading on May 8, 2006.)

There was no public testimony.

McLAY/SHADLE - SO MOVED FOR THE ADOPTION OF ORDINANCE 06-24 FOR SECOND AND FINAL READING BY READING OF TITLE ONLY.

There was no discussion.

VOTE: YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

C . Ordinance 06-25, Of the City Council Amending Homer City Code Chapter 1.78 to delete all references to the Overall Economic Development Plan (OEDP) and insert the Comprehensive Economic Development Strategy (CEDS). City Clerk. Housekeeping type Ordinance. (First Reading April 24, 2006, Public Hearing and Second Reading on May 8, 2006.)

There was no public testimony.

HEIMBUCH/WYTHE - SO MOVED FOR THE ADOPTION OF ORDINANCE 06-25 FOR SECOND AND FINAL READING BY READING OF TITLE ONLY.

There was no discussion.

VOTE: YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

D. Ordinance 06-26(A), Of the Homer City Council Amending the FY 06 Operating Budget by Accepting Settlement Funds in the Amount of $800,000.00 Related to its Claims in the Hurlen Case and Transferring those Funds to the Port and Harbor Reserves. City Manger. Fiscal Note: Transfer from (Revenue) Account 400.600.4906 Port and Harbor/Port and Harbor Administration Proceeds - Law Suits to (Expenditure) Account 415.380.4906 Port and Harbor Reserves $600,000.00 and to Account 100.040.4906 General Fund $200,000.00. (First Reading April 24, 2006, Public Hearing and Second Reading on May 8, 2006.)

D.1. Ordinance 06-26(S), Of the Homer City Council, Amending the FY 06 Operating Budget by Accepting Settlement Funds in the Amount of $800,000.00 Related to its Claims in the Hurlen Case and Transferring $600,000.00 [those Funds] to the Port and Harbor Reserves and $200.000 to the General Fund. City Clerk. Recommend adoption via amendment after public hearing.

There was no public testimony.

WYTHE/NOVAK - MOVED FOR THE ADOPTION OF ORDINANCE 06-26(A) BY READING OF TITLE ONLY.

There was no discussion.

WYTHE/NOVAK - MOVED TO AMEND ORDINANCE 06-26(A) WITH SUBSTITUTE ORDINANCE 06-26(S).

There was no discussion.

VOTE: (primary amendment one.) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

VOTE: (main amended motion) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

E. Ordinance 06-30, Of the City Council Placing a Peak Seasonal Sales Tax Adjustment Issue on the October 3, 2006 Regular Election Ballot, and Amending Homer City Code Section 9.16.010, Sales Tax Levied, Pursuant to Voter Action. Heimbuch. (Public Hearing and Introduction First Reading May 8, 2006, Public Hearing and Second Reading on May 22, 2006.).

There was no public testimony.

ORDINANCE(S)

A. If reconsideration passes: Ordinance 06-21, Of the City Council of Homer, Alaska Amending Homer City Code Section 21.44.040, Urban Residential UR and 21.45.040, Rural Residential RR Concerning Dimensional Requirements. City Manager. Requested by Planning Commission. (First Reading March 28, 2006, Public Hearing April 10, 2006, Second Reading April 24, 2006,Reconsideration May 8, 2006.) If reconsidered, amendment requested by City Clerk.

Reconsideration Passed. Main motion is back on the floor as made on April 24, 2006:

HEIMBUCH/McLAY - SO MOVED FOR THE ADOPTION OF ORDINANCE 06-21 FOR SECOND AND FINAL READING BY READING OF TITLE ONLY.

There was no discussion.











WYTHE/McLAY - SO MOVED TO AMEND ORDINANCE 06-21 SECTION 1. HOMER CITY CODE 21.44.040(B)(3) TO STRIKE "BY A COMMISSION RESOLUTION APPROVED BY THE CITY COUNCIL" AND INSERT "AS SET FORTH BY RESOLUTION OF THE CITY COUNCIL", SO THAT THE SECTION READS: ADJACENT TO THOSE RIGHTS-OF-WAY THAT LEAD TO KACHEMAK BAY AND HAVE BEEN DETERMINED TO BE UNSUITABLE FOR ROAD CONSTRUCTION AS SET FORTH BY RESOLUTION OF THE CITY COUNCIL, ALL BUILDINGS SHALL BE SET BACK FROM THE BOUNDARY OF THE RIGHT-OF-WAY AS PROVIDED IN SUBSECTION (B)(2).

There was no discussion.

VOTE: (primary amendment 1.) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

WYTHE/McLAY - SO MOVED TO AMEND ORDINANCE 06-21 SECTION 2. HOMER CITY CODE 21.45.040(B)(3) TO STRIKE "BY A COMMISSION RESOLUTION APPROVED BY THE CITY COUNCIL" AND INSERT "AS SET FORTH BY RESOLUTION OF THE CITY COUNCIL", SO THAT THE SECTION READS: ADJACENT TO THOSE RIGHTS-OF-WAY THAT LEAD TO KACHEMAK BAY AND HAVE BEEN DETERMINED TO BE UNSUITABLE FOR ROAD CONSTRUCTION AS SET FORTH BY RESOLUTION OF THE CITY COUNCIL, ALL BUILDINGS SHALL BE SET BACK FROM THE BOUNDARY OF THE RIGHT-OF-WAY AS PROVIDED IN SUBSECTION (B)(2).

There was no discussion.

VOTE: (primary amendment 2.) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

There was no discussion.

REVOTE: (main motion as amended) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

B. Ordinance 06-30, Of the City Council Placing a Peak Seasonal Sales Tax Adjustment Issue on the October 3, 2006 Regular Election Ballot, and Amending Homer City Code Section 9.16.010, Sales Tax Levied, Pursuant to Voter Action. Heimbuch. (Public Hearing and Introduction First Reading May 8, 2006, Public Hearing and Second Reading on May 22, 2006.).

HEIMBUCH/STARK - SO MOVED FOR THE ADOPTION OF ORDINANCE 06-30 BY READING OF TITLE ONLY FOR FIRST READING AND INTRODUCTION.

STARK/SHADLE - MOVED TO AMEND TO BE EFFECTIVE 1 APRIL 07.

Discussion:

If this is passed and approved by the voters, the question is when does it take effect. The Borough needs time to be able to put this into effect. The next date that there would be a change would be April 1st, and therefore is a proper time for it to take effect.

NOVAK/ - I WOULD MAKE A FRIENDLY AMENDMENT, IF THAT IS POSSIBLE, TO CHANGE THE DATE TO JANUARY 1, SO THAT THE PEOPLE WOULD GET THE BENEFIT OF THE REDUCED RATE THIS NEXT WINTER, WHICH GIVES THE BOROUGH ENOUGH TIME TO MAKE THE CHANGE.

Mayor Hornaday did not recognize this as a friendly amendment nor was there a second to this friendly amendment as a motion.

Discussion continued on Councilmember Stark's amendment.

April 1st would be the first clean and clear day for implementation if this passes voter approval.

January won't work, it prorates the intent of the Ordinance.

VOTE:(primary amendment 1) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

Discussion:

Opposition to the whole varied sales tax thing.

There are quite a few downsides.

Starting at the beginning of the year is better.

The residents of Homer do not have a significant interest in making sure that those responsible for and benefitting from a seasonal demands of City services should significantly contribute a portion to City maintenance.

City services, size and scale, are not planned around seasonal and transient population increases. There are a lot of City services that solely happen in the winter months. People in the summer do not benefit from much of the road maintenance plowing budget expenses.

There are a lot of activities that the City raises and increases sales tax for that have absolutely no benefit to the transient populations in Homer.

There are businesses that will be directly and indirectly impacted by a sales tax increase. Every business will have to flex their sales tax twice a year, having to endure the expense of having to reset their sales tax structure in their cash registers, or whatever their collection process.

Major portions of resident income is expended in the summer. So this is asking people who do major construction, home maintenance, or lawn and yard maintenance in the summer to endure an additional sales tax. These things have to be done in the summer.

Concern was expressed that this would encourage the locals to make purchases up the road.

Pros and Cons were noted.

The size if this City is predicated on maximum densities.

Short falls and need to find money for PERS was mentioned, as was depreciation accounts, and reserves.

The entire town is aimed at trying to get a particular kind of person into this area. People come here for the cream of the crop of what Homer has to offer.

The town and area desperately needs year round residency, people with the commitment to stay here. These are people who need the benefit of the doubt.

There are a lot of people who do not have fluctuations in expenditures and the desire is for these individuals to have the benefit of the doubt regarding the development of fair tax policies.

This would be supportable if there were measurable, sizeable, very specifically identifiable benefits to the members of this community. If it could be identified that this will not unduly harm those people who primarily function in the tourist industry; hotels, motels, bed and breakfasts and those facilities; by causing them to have an increase in their sales tax.

There is no specific fiscal data to support this.

The City should benefit from tourism.

The tourist industry passes along increased costs to the customer. Such as - any time the cost of fuel goes up the price of a charter goes up, etc.

Isn't increased cost to the City operations a passable cost?

This is a seasonal sales tax in a modified way. What is being talked about is 6% less in the winter and add a percent more in the summer. There was suggested to add 1% in the summer and leave the sales tax as it is for the rest of the year.

People do look at the bottom line in terms of cost and don't care where the money goes, whether a tax or to the product. All that the people care about is what it costs to get this service or item. So it does raise the cost for everything.

NOVAK/WYTHE - LIKE TO GO BACK AND MAKE AN AMENDMENT TO CHANGE THE EFFECTIVE DATE TO JANUARY 1 SO THAT IF THIS WERE TO PASS PEOPLE WOULD GET SOME BENEFIT THIS WINTER AND THAT GIVES US SOMETHING ELSE TO CRANK INTO THE DISCUSSION HERE.

Discussion:

It seems completely counter to the previous discussion. The first thing would be to lower the tax. If this is going to be seasonal tax it should be implemented when the season starts.

People are not going to vote for more tax in April unless they see some compensation somewhere.

This whole thing is up for more discussion since this is just introduction.

Moving the date around when this should begin, the reason for the April 1st date was to provide the Borough enough time for implementation. There was confirmation that there is enough time for the Borough to implement by the first of the year.

City Manager Wrede noted that there was the discussion on the dates for implementation with the last sales tax increase, to get the information out to the business and for the businesses to set themselves up for the sales tax collection. That was one of the reasons that it was delayed a few months. He expressed his belief that the Borough could do it, but that the Borough comment that they do not have enough time and that they have an obligation to the businesses.

It was noted that the last time the sales tax was voted on, it was in March (1) for implementation April 1.

VOTE: (primary amendment 2) YES: WYTHE, NOVAK, HEIMBUCH

NO: McLAY, SHADLE, STARK

MAYOR: TIE VOTE: YES:

Motion carried.

Councilmember Shadle stated that both sides have good arguments and that he is undecided. He encouraged the Council to concentrate on the fact that this is going to the ballot, that he is all for the people and that the voters should be allowed to make the decision.

City Manger concurred with Councilmember Shadle, adding that if this passes it will be incumbent upon staff to get out as much information as it can for the voters, so that they can make a reasonable decision. He noted that the information would not only be on what it means fiscally or for City services, but what it might mean for businesses and the whole gambit. The more information the better.

There were no further comments.

VOTE: (main amended motion) YES: SHADLE, STARK, NOVAK, HEIMBUCH, McLAY, WYTHE.

Motion carried.

C. Ordinance 06-31, Of the City Council Enacting a New Chapter 5.38, "Bear Attraction Nuisances" of the Homer City Code Prohibiting the Creation or Maintenance of a Bear Attraction Nuisance and Establishing Penalties for Violations. McLay. (First Reading May 8, 2006, Public Hearing May 22, 2006, Second Reading June 12, 2006.)

McLAY/STARK - SO MOVED FOR THE ADOPTION OF ORDINANCE 06-31 FOR FIRST READING AND INTRODUCTION BY READING OF TITLE ONLY.

Mayor Pro Tempore McLay commented briefly regarding the need for the Ordinance, noting that the Larry Lewis gave a pretty good presentation to the Council and that he has been looking at how this has been working in the Kenai/Soldotna area and what they have going on up there. He noted that Kenai/Soldotna have not put an Ordinance through like this, but they do have penalties for violations.

He stated that he does see a problem that is going to get worse if the Council does not do something about it and that he thinks this a good place to start. In his review he considered making some stiffer penalties and maybe requiring bear proof garbage containers and how to accomplish that. He relayed his concern that if this is made too difficult the Council can't make it happen. Right now it is going to take a lot of getting information to the people to let them know the requirements and about what is available to them so that they don't have problems with bears. This is a step in the right direction.

There were no further comments.

VOTE: YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

D. Ordinance 06-32, Of the City Council Setting the Property Tax Rate (Mill Rate) for Homer, Alaska for Fiscal Year 2006 at 4.00 Mills. Shadle. (First Reading May 8, 2006, Public Hearing and Second Reading May 22, 2006.)

SHADLE/STARK - SO MOVED FOR THE ADOPTION OF ORDINANCE 06-32 FOR FIRST READING AND INTRODUCTION BY READING OF TITLE ONLY.

Council discussion included the following:

Reason for ordinance is that all property assessments are going up, all over town. Council based the budget on the 2005 property taxes. By reducing the property tax mill rate by half a percent the City will still get the same amount of money budgeted for based on the 05 property taxes.

It is owed to the citizens in the City to bring the property tax down to the number budgeted.

A lot of people around town have commented that they are having a hard time making their property tax, which has gone up 20% to 25% in some places. That's huge.

This is a win/win situation.

Some of the things cited in the Ordinance are anticipated and sort of pie in the sky things that have not yet been resolved and should not be banked on. Some are funds specifically allocated that cannot be included as wind fall or money that can be spent.

There is a reserve fund obligation, to have three to six months of funds at any time, which is somewhere between $2.5 million and $5 million. Based on the 2006 budget the year will be closed below $2 million in the reserve fund.

The new library comes on line soon. Loan cost is about $250,000.00 a year with an additional $200,000.00 plus for maintenance and operations for 2007.

Depreciation funding issue. Governmental accounting standards requires depreciation funding at a level that has never been seen.

HARP funds to maintain roads due to sunset in 2007 and if not reapproved by the voters there will not be funds to maintain and construct new roads.

Town Center with a City Hall obligation. State funds of $2 million to apply to new City Hall, therefore need to start thinking about the new City Hall. City will have to come up with a substantial amount of the funds for the new City Hall even with grant money.

PERS obligation that no one likes, that no one believes it the City's fault or that it should be the City's responsibility, but at the end of the day the City still prides itself in paying its bills when due. Even if the City takes this to court the bill will come due and it is very unlikely that the State is going to accept this responsibility.

The basking in revenue concept that is very unique.

All of the funds coming to the City of Homer are specifically allocated, not discretionary.

The sales tax increase was to try to meet the expenditure needs, and included a property tax reduction.

There was opposition to reducing revenue via property tax when the Council may need to turn around at budget time or in a year's time increase it again. This is very irresponsible.

The City has major responsibilities that it is not meeting and cutting the property tax will not help.

Status quo is better right now until the revenues are realized, perhaps in the future the mill rate can be decreased.

Objection was expressed to the comments in opposition of the mill rate reduction and to statements in the Ordinance.

Confidence was expressed that, due to the increase in property value, the Council will not need to raise the mill rate and that money will be flowing into the City coffers far in excess of what is needed.

The simplest, best and most responsible thing to do is to lower the mill rate to 4.0 and that the City will still get the same amount of money budgeted and the citizens of this community will not suffer as much.

Costs are going up for everything for the citizens and it would not be good to have to raise the mill rate next year.

The current mill rate is reasonable.

The benefits of Fred Meyer coming to town are not realized at this time, are not known, are not identified. Earliest that this would impact the revenue would be 2007.

Concern was that if the property tax were decreased and the sales tax passes it would probably be a wash.

It is best to stay prudent and hold the line on the mill rate until the end of this year and see if there is any surplus money.

The seawall and pioneer dock money, settlement money, will be used to reimburse the City of costs incurred in both of these projects and legal fees, which does not even begin to cover the City costs.

City Manager Wrede stated that the two lawsuits are not windfall revenues and are an attempt to try to make the City whole for money already spent. On the seawall (2) the City up fronted $1 million to build wall and the City was going to, at least, sell bonds to get the money cash back and pay the bonds off with assessments. Because of a lawsuit and some other things the City was never able to sell the bonds. There are also opportunity costs. The seawall settlement is still being negotiated. The same with the Hurlen Case (3), the City up fronted a lot of money, were going to sell some bonds that did not happen due to a lawsuit and there were legal fees associated with the case. On top of that the City has to repair the damage from when the piles were not done correctly. He emphasized that these are not wind fall monies, these are reimbursements.

Councilmember Stark interjected, quoting the Mayor, that the City appropriated $250,000.00 to repair Pioneer Dock, which replaces the money put into the General Fund.

City Manager Wrede clarified that money is not for the City that it goes to the Alaska Marine Highway System to improve their gangway and their other docking facilities there.

Council discussion continued:

Keep this in mind, that the Council is not dropping the mill rate tonight, that this is just introduction and so that the public may comment on it.

Council owes it to the public to be able to come in the next couple of meetings and comment on whether they think the mill rate should go up or down or stay the same.

Vote no at a later meeting.

This is the people's money for City revenues.

Earlier comments were reiterate and the note of property value assessments increase of 20% to 25%.

Attention to page 9 of the Supplemental Packet includes a letter from Joan Terrell that says she was annexed into the City three years ago, that she thought her mill rate was going to be quite a bit lower, then, after annexation, found that her mill rate was increased. There were probably a lot of people, who were annexed, upset with the new mill rate. This provides a chance for the Council to do something good for them. To at least hear from people.

Belief expressed that most people would like to see a property tax reduction, including Councilmembers. However, on the fiscally responsible side - Council's function, this is not responsible to create what is potentially going to turn into a yo-yo syndrome.

Council increased the property mill rate the first year Councilmembers Wythe and McLay were on the Council to balance the budget, turned around and in exchange for a sales tax increase deleted the mill rate increase.

There is a likelihood that if this mill rate is reduced that the Council will have to increase the mill rate at the end of the year.

The long range pictures must be looked at, there are a lot of long range debts that are not going to go away.

Council just bought the Community Schools program, additional costs.

There are a lot of things that have gone on since Council did the 2006 budget.

Concern that the budget will be nip and tuck. $3.00 per gallon for home heating fuel is going to cost the City a ton of money.

Mayor Hornaday inquired about the loan payment.

City Manager Wrede responded that he does not recall the exact amount.

Council discussion continued:

Opposition expressed to raising the mill rate if this reduction is approved. The mill rate has only gone down in the last five years. The mill rate affects the property owners and citizens of Homer more than the sales tax rate.

Belief expressed that the Citizens of Homer are more appreciative of a lower property tax rate than they are of a lower sales tax rate.

Correcting statement was made that those in opposition of this Ordinance are not talking about raising the mill rate, but about maintaining the mill rate and not raising it in the future.

There are others collecting money on the increases and not just the City. The borough is collecting a huge chunk. Everyone out there is collecting money. The City is just one of many people in this chain of events in this society that is collecting a fee. The City's fee is not really proportionately large.

This is a reasonable thing to consider, but it would be good for other people to adjust their fees.

The list of City expenses is long and it costs a whole lot of money to live in Homer and to live in the United States.

This is not a narrow City problem. The City is being responsible by trying to hold the line and not increase the cost to the people.

If Council sees that there is more money than needed, based on increased services to the City, then the taxes could be reduce. But the City does have increased services and has taken on more debt.

Mayor Hornaday responded to a comment by a Councilmember that what he heard Borough Mayor John Williams say was that was not going to ask for a two tenths (2/10) of a mill increase.

Councilmember Shadle expressed agreement that all of the costs to the City are going up, adding that the people that Council represents also have increased costs and that he believes that the City should not be greedy or stingy by keeping this exorbitant amount of money that the City does not deserve to have. He emphasized that his point is that the property tax is going to stay the same and the City is going to get more money from the people, unless the Council reduces the mill rate.

There was no further discussion.

VOTE: YES; HEIMBUCH SHADLE, STARK.

NO: NOVAK, McLAY, WYTHE.

MAYOR: TIE VOTE: NO.

Motion failed.

CITY MANAGER'S REPORT

A. City Manager's Report (Updates and Follow-Up: 1. Port of Refuge: Assigned to Port and Harbor Commission, 2. Fred Meyer Plat See Memorandum 06-76 on the Consent Agenda, 3. Spit Bathroom Report, Port and Harbor Commission to make recommendation, 4. Community Schools Program - job recruitment advertising and final budget to Council scheduled for May 22, 2006, 5. Peninsula Conference of Mayors Meeting hosted by Mayor Hornaday and held in the Cowles Council Chambers on Friday, April 28, 2006, and 6. Deep Water Dock Update, see Resolution 06-52 on the Consent Agenda; May Employee Anniversaries: Dan Cornelius P/H 28 years, Michele McCandlish Finance 21 years, Katherine George Library 12 years, Sheri Hobbs Administration 12 years, Jo Earls Finance 7 y ears, Anne Marie Holen Administration 4 years, Mike Eastham HPD 1 year, Julia Martin P/H 1 year and Mark Whaley P/H 12 year; Repaving project Cost Estimates for 2006; Letter from Cordova Re: Fishing Incentives; KPB Certificate of Appreciation to HVFD for Sponsorship and Participation in the Fire Corp Training; Letter from Kachemak City regarding Kachemak Bay Campus of the KP College acquisition of the Homer City Hall building; and a Tri- Borough Commission regarding the abuse of Methamphetamine; Conference of Mayors April 28th agenda.)

Additional Report and comment:

Possible Flu Pandemic, that several meetings have been held and on May 25th a meeting at South Peninsula Hospital with additional meetings and conferences. There is a draft response plan in circulation and Council stated that they would like to see the plan. The Borough is having a conference on the Flue Pandemic in June. The June meeting is in Soldotna and the Manager will get that meeting date for the Mayor and Council.

Spit restrooms. Staff believes the budget to be insufficient to build another restroom. Port and Harbor Commission will be discussing. Either have to reduce what will be built or appropriate more money or explore the expansion and enhancement of the existing restroom at the Ice Plant. There was discussion about using City staff for the labor on the Restroom and that the real costs of using City staff for labor be appropriately and accurately accounted to the capital project. This City is deficient in the number of restrooms around this town, specifically since it is a tourist oriented town. The expensive restroom was built, sort of, bomb proof to stand up under depredations of some people, the minority in the community. The location of the bathroom proposed is relatively isolated from the general public and that it could be built at a lower standard of survival at a lower cost. Comment was made that the original budget for the other restrooms was about $120,000.00 and then it went up due to the strengthening that was deemed necessary. Port and Harbor Commission was very clear that they felt that this bathroom should be used for the commercial fishermen, that there was a real need for that, that the guys getting off the boats and working on the dock and the truck drivers picking up fish. Without a card to get into the fish house, there is no available restroom. Port and Harbor Commission is going to look at this again, because there is a need in that area. There is also a need around Coal Point for tourists. The grant money was allocated for commercial fisheries. There is also a need in the area of the fuel dock as well. Concern that the City keeps postponing the project and as a result the money won't go as far due to rising construction costs. A time frame on the restroom was not known. It would be good if this were finished before winter.

City Manager Wrede advised that he will be coming back to the Council with several projects such as the pole barn Ordinance 06-27, which he pulled last meeting due to not having exact information and some similar things going on with the Animal Shelter project as well.

The Fred Meyer plat was briefly discussed, specifically the lack of a curb return where two streets meet. Public Works Director also made this comment.

Repaving project discussed. Desire for pedestrian pathways included in the paving projects was emphasized. There are some problems regarding ditching and utility locations in conjunction with constructing sidewalks. It would be difficult to narrow the lanes on some of the roadways and still make it possible to stay in the traffic lane while making turns such as with Kachemak Way. Some comments were made about the walk ability issues in Homer and info mentioned from the forum of a Walkable City. Ten foot lanes are perfectly adequate in Homer. The Mayor requested that at least one roadway be used as a test to incorporate a pathway by narrowing the vehicular traffic lanes and without disrupting the utilities. He specifically suggested/requested that this be done on Main Street. Ten foot lanes and four foot walk ways. Councilmembers Wythe and Novak requested a Resolution regarding the repaving project with some specifics and to move forward with this project at the $688,000.00 level with some really clear descriptive and visual information to show what happens when the crown of the road is moved, changing the paving surface area. It would be nice to do some sidewalks or some striping, but the pavement needs to be laid down this summer. This needs to come forward quickly so that this project comes to fruition this construction season.

Mayor Hornaday advised that those who went to Juneau did urge the highway department to put sidewalks and trails in on the lower part of Main Street.

Mayor Pro Tempore McLay noted, humorously, that the memo on the paving project states Rochelle to Homer High School, adding that he believes this to be in error and the City Manager confirmed.

B. Bid Report. (ITB (1) Track Excavator & (2) Rubber Tire Front End Loaders. Sealed bids are due to the City Clerk by 2:00 p.m. on Thursday, May 11, 2006.)

C. Public Input on Question of the Week and other matters.

Mayor Hornaday encouraged the Council to read the public input, finding it very interesting. Councilmembers indicated that they had been reading this input.

COMMITTEE REPORT

A. Public Arts Committee (Meeting scheduled for Thursday, May 11th 1 to 3 p.m. City Hall Cowles Council Chambers. )

B. Transportation Advisory Committee (Meeting scheduled for Tuesday, May 16th at 5:30 p.m. City Hall Cowles Council Chambers.)

C. Comprehensive Plan Committee (Meeting scheduled for Tuesday, May 9th at 5:30 p.m. City Hall Conference Room.)

There were no comments on committee reports.

PENDING BUSINESS

None scheduled.

NEW BUSINESS

A. Consent Agenda Item E. Memorandum 06-70, from Mayor Pro Tempore McLay, Re: Scheduling Public Hearing for Ordinance 06-12(S) for May 22, 2006. Recommend adoption.

NOVAK/STARK - MAKE A MOTION TO ADOPT MEMORANDUM 06-70.

Mayor Hornaday passed the gavel to Mayor Pro Tempore McLay as he excused himself from the table due to his previously expressed conflict of interest.

Discussion kept creeping into the merits of the Ordinance and the process, Mayor Pro Tempore McLay had to bring the discussion back to the question on the floor - whether or not to conduct a public hearing on May 22, 2006 on Ordinance 06-12(S).

Mayor Hornaday returned to the table and received the gavel back from the Mayor Pro Tempore at 8:52 p.m.

B. Consent Agenda Item G. Memorandum 06-76, from City Manager, Re: Dedication of Land for Right of Way Purposes in the Town Center. Recommend approval.

NOVAK/WYTHE - I'D LIKE TO MAKE A MOTION TO ADOPT MEMORANDUM 06-76.

Discussion points:

This works the lower half of the Town Center.

The connections going up to Pioneer Avenue and across are based upon the Second Town Center Plan.

If the City is going to dedicate right-of-way the Council should see the whole layout for the roads in the Town Center, or at least be on the same page with the people that put the Town Center plan together so that Council can have the roads mesh with the area to the north and to the east in the Town Center. Right now this is leaving a blank, it is unknown if it is going to mesh since no one has looked at the whole picture.

In opposition to the above point - if the City keeps waiting to finish a complete plan before anything is done, nothing gets done, nothing gets accomplished. This is a first step to provide clarity on where this is going and it is not going to create problems with the design, with the Town Center Plan or anything that Council has approved.

Going east to west is fine, the issue is going up to Pioneer. In some respects, the road has been arbitrarily drawn in from Fred Meyer.

If the lower part can get done without dedication then great. Concern expressed that this is getting a false start. Desire to point this out while negotiations are in the process.

City Manager Wrede pointed out that they are discussing a lot, the connection up to Pioneer and the connection to Poop Deck. He noted that there was a lot of discussion about whether or not to try to plat it all concurrently, so that it would be known where the whole system is located. Part of the reason for holding off, according to the Manager, is due to the Corp of Engineers in that the upper part is the wetter part of the whole Town Center and so the Corp has asked the City to hold off until the Wetlands Delineation is done. He informed the Council that the plan is that CIRI, the City and the Kachemak Land Trust to split the cost to do the Wetlands Delineation for all of the lands in the Town Center outside of the Fred Meyer property. He advised the Mayor and Council that once this is done they will know exactly where the north connection right-of-way will be located, interjecting that it is really hard to hold this whole process up until that can be ascertained.

Additional comment was made, emphasizing that the intent is not to hold the process up, but for there to be a realization that what the City Manager is saying is that the City should not be locked into a road going north until it is known where that northward road needs to go and to go ahead and lay the road east and west.

City Manager Wrede declared agreement and received non verbal affirmation.

VOTE: YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

RESOLUTIONS

None scheduled

COMMENTS OF THE AUDIENCE

Audience may comment upon any matter at this time.

Lance Stevens expressed his frustration with road maintenance and the song and dance that he has gotten the last couple of years about what "they" are going to do with his road. He advised that he lives off of Race Road, which really does not connect with anything except through Janeview due to the private property that splits Race Road. He stated that he did not know why the road way was named Race Road. (4) The bottom of Janeview has continued to get worse and worse, those bubbles that show up in the road have now become a lake and that they cannot get through their road without risking getting stuck. That road also serves businesses that generate sales tax revenue. When guests can't come they cannot generate sales tax revenue for the City. The "department" has said things like: 1 ) There is not much I can do. 2) There is only so much we can budget. 3) We only took over the road that the borough had, we don't have to improve it. Mr. Stevens interjected that he is not asking for the City to improve it that he just wants to be able to get down it. He noted that the road was not this way when he first moved here five years ago, which was the first year that they were annexed. He asked that the City just make it so that he can get there. 4) There is nothing that can be done. 5) Today when his wife called, because his mom got stuck in the road, she was told that there is really not much I can do, I can probably bring a smaller truck and spread some gravel out down there and make it passable, but I really don't want to do that. Because he did not feel that someone his age should be moving gravel by hand.

Mr. Stevens stated that he was shocked by that comment, because first he said that there was nothing that could be done and now says there is something that can be done, but because of a physical limitation of a City employee, he does not want to do it. Mr. Stevens asked, "So, which is it?" Can he not do it, because of one reason, or Can he do and do it, because of another. Mr. Stevens stated that he does not know what the answer is and that he is here, at the Council meeting, because he reports to somebody and that Mr. Stevens just does not know who. He stated that he does not want to be a dead horse, but the only thing that he gets being annexed is road maintenance. Snow plowing and fixing his road in the summer. He stated that he gets no other benefits that he can see. He noted that the same services that were there, are still there. Maybe that is short sighted, maybe it is not. He stated that he does not expect the Council to come pave his road or to put City water and sewer in without a cost and that he only expects his road to get maintained. He told the Council that he would be happy to give his half of a percent that they are talking about giving back and asked that someone just come and fix his road.

COMMENTS OF THE CITY ATTORNEY

City Attorney Tans was not present.

COMMENTS OF THE CITY CLERK

City Clerk Calhoun had no comment.

COMMENTS OF THE CITY MANAGER

City Manager Wrede had no comment.

COMMENTS OF THE MAYOR

Mayor Hornaday reported that there was a successful Shore Bird Festival this last weekend and thanked the Chamber of Commerce, Fish and Feathers and everyone else who worked on it. He noted that the birds did not show until Sunday, May 7, 2006.

COMMENTS OF THE CITY COUNCIL

Councilmembers McLay, Heimbuch, Stark, Novak and Wythe had no comments.

Councilmember Shadle commented on Lance Stevens comments about his roadway not being maintained and that he is willing to help with whatever he can do, that he would appreciate a call from Mr. Stevens or that, perhaps, they can get together after the meeting regarding this matter. Councilmember Shadle stated that he would like to see where this road is and see what can be done about it so that Mr. Stevens parents aren't getting stuck in the road.

ADJOURNMENT

There being no further business to come before the Council the meeting was adjourned at 9:02.29 p.m. by Mayor James C. Hornaday.

The Next Regular Meeting is scheduled for Monday, May 22, 2006 at 7 p.m., the next Committee of the Whole is scheduled for Monday, May 22, 2006 at 4 p.m.

All meetings are scheduled to be held in the Homer City Hall Cowles Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska.

____________________________________

MARY L. CALHOUN, CMC, CITY CLERK

Approved: __________________________

1. Special Election was held March 22, 2005.

2. Ocean Drive Bluff Erosion Control Project

3. Pioneer Dock Project

4. Named after Lloyd Race, bachelor, who homesteaded in that area. Race Road is an old homestead roadway.